Key issues in Novartis AG's legal battle for patent

A decision in the seven-year legal battle is keenly awaited by the two most interested parties — big pharma companies and health aid groups — with both sides saying the outcome will set a precedent with far-reaching consequences for the future availability of the drugs.

businessUpdated: Apr 01, 2013 12:04 IST

Agencies

A decision in the seven-year legal battle is keenly awaited by the two most interested parties — big pharma companies and health aid groups — with both sides saying the outcome will set a precedent with far-reaching consequences for the future availability of the drugs.

The country's patent office has so far refused to grant protection, asserting that the amended form of Glivec was not vastly different from the earlier version.

The challenge strikes at the heart of the country's patent law, which restricts pharmaceutical companies from seeking fresh patents for making only small modifications to existing drugs -- an industry practice known as "evergreening".

The Swiss firm has threatened to halt supplies of new medicines to the country if the court does not rule in its favour, London's Financial Times reported.

Novartis approached the apex court challenging the order of Chennai-based Intellectual Property Appellate Board (IPAB), which rejected its appeal against patent department's decision on Glivec.

The drugmaker has argued that its leukemia drug Gleevec, known in Europe and India as Glivec, was a newer, more easily absorbed version that qualified for a fresh patent.

The company filed an appeal, but the country's patent appeals office turned it down in 2009 on the grounds the company was unable to show significant increase in efficacy of the drug.

The Comptroller General of Patent and Design had denied patent to Glivec on several grounds including its alleged failure to meet stipulations under sections 3(d) and 3(b) of the Indian Patent Law.

Novartis then approached the Supreme Court in August 2009, which heard arguments seeking to challenge the interpretation and application of the country's patent law in the case.

"The purpose is not to make money from the poor. This is not the purpose, but am I not entitled for patent for our drug? We are fighting the case on principle," senior advocate Gopal Subramanium, appearing for the company, had said.

He had submitted that there should be no cause of concern that the poor would not get treatment and submitted that 85 per cent of the patients are treated free under its scheme.

Specialists say"Across the world, people rely on India for supplies of affordable versions of expensive patented medicines," said Leena Menghaney of Doctors Without Borders. "This case will have fundamental consequences."

"If the situation stays as now, all improvements on an original compound are not protectable and such drugs would probably not be rolled out in India," said executive Paul Herrling, who is leading the company's handling of the case.

It would "be dire for people in the developing world who depend on generic drugs made in this country. It could seriously curb access".

Generic drug firms in India -- long known as the "pharmacy to the developing world" -- have been a major supplier of copycat medicines to treat diseases such as cancer, TB and AIDS for those who cannot afford expensive branded versions.

The cost difference between generic and branded drugs is crucial for poor people around the world, MSF says.

"The difference in price was huge. The generic version makes it affordable to so many more poor people, not just in India, but across the world," said YK Sapru, of the Mumbai-based Cancer Patients Aid Association.

Glivec -- often hailed as a "silver bullet" for its breakthrough in treating a deadly form of leukaemia -- costs $4,000 a month in its branded form while its generic version is available in India for around $73.

The case once again pits big pharmaceutical companies against health activists and aid groups with both sections arguing that the judgment would be an important milestone for the future of the pharmaceutical industry worldwide.

"The Novartis verdict is important because it will determine whether India gets to limit patents to genuine new drugs, or whether drug companies get to "evergreen" their patents until eternity, simply by re-patenting a slightly modified version of a known substance," said Ellen 't Hoen, a pharmaceutical law and policy consultant.

Research and innovationWestern pharmaceutical companies have warned that a rejection of Novartis' application would discourage investment in research and innovation, and would hobble drugmakers' efforts to refine and improve their products.

The international drug majors have been pushing for stronger patent protection in India to regulate the country's $26 billion generic drug industry, which they say often flouts intellectual property rights.

In a statement sent to The Associated Press late in 2012, Novartis said patent protection was important to ensure effective protection for innovation.

"Knowing we can rely on patents in India benefits government, industry and patients because research-based organizations will know if investing in the development of better medicines for India is a viable long-term option," the company said.

The country, which has emerged as the world's pharmacy for the poor, has come under intense scrutiny from pharmaceutical giants who say 2005 Patent Act fails to guarantee the rights of investors who finance drug research and development.

"Generic companies depend on the freedom to operate. If there are too many intellectual property-related challenges, then the companies very quickly withdraw from making that drug," said Menghaney.

The international drug majors fear that a ruling in favor of Novartis would lead to a proliferation of patents — some based on a minor tweaking of formulation and dosages — on dozens of other generic medicines that Indian companies have been producing and supplying to needy nations at far lower costs than those charged by Western drug manufacturers.

And the fallout of the judgment will be felt across the world, says Menghaney. "It's not just about India."

"If generic competition on many crucial medicines ends, then prices for these medicines will increase, both in India and across the developing world. This would be devastating for millions who rely on India for affordable medicines."